Tuesday, September 30, 2008

It's been a couple of weeks since I've written anything about Sarah Palin. Truthfully, there really isn't much to write.

But I have to question something she said last week to Katie Couric that was broadcast today, and which she also said at a rally in Ohio.

She said she has been listening to Joe Biden's speeches since she was in the second grade.

The original comments came at an Ohio rally Monday, when Palin told the cheering crowd, "I'm looking forward to meeting [Biden] too, I've never met him before — but I've been hearing about his senate speeches since I was in, like the second grade."

Hmmm. My kids are pretty politically in tune, but I can guarantee you that when they were in the second grade they did not turn on C-SPAN II so they could listen to Senate speeches.

And somehow Palin just doesn't come across as that wonkish to me.

So this line was obviously inserted. Palin, 44, is clearly trying to take a swipe at the age of Biden, who is 66.

But I don't see how she wins on that at all. For one thing, the vice President only becomes President if the President doesn't finish his term. And Obama is 47. For another thing, if Biden, at 66 is old, then what about John McCain, who is six years older than Biden?

It is true that Biden and McCain are statistically speaking more likely to not make it through the next four years than are Obama and Palin. But put it this way-- suppose that in the next four years McCain and Biden both go to meet their maker. In that case, would you rather have elected this year's Democratic ticket, or this year's Republican ticket?

Monday, September 29, 2008

John McCain's whole strategy has been based on essentially two elements-- the first is to try and suggest that for America to elect Barack Obama would be to take too big of a risk, and the second is to argue that McCain is a 'safe' alternative.

Senator John McCain was on a roll. In a room reserved for high-stakes gamblers at the Foxwoods Resort Casino in Connecticut, he tossed $100 chips around a hot craps table. When the marathon session ended around 2:30 a.m., the Arizona senator and his entourage emerged with thousands of dollars in winnings.

A lifelong gambler, Mr. McCain takes risks, both on and off the craps table. He was throwing dice that night not long after his failed 2000 presidential bid, in which he was skewered by the Republican Party’s evangelical base, opponents of gambling. Mr. McCain was betting at a casino he oversaw as a member of the Senate Indian Affairs Committee, and he was doing so with the lobbyist who represents that casino, according to three associates of Mr. McCain.

The visit had been arranged by the lobbyist, Scott Reed, who works for the Mashantucket Pequot, a tribe that has contributed heavily to Mr. McCain’s campaigns and built Foxwoods into the world’s second-largest casino. Joining them was Rick Davis, Mr. McCain’s current campaign manager. Their night of good fortune epitomized not just Mr. McCain’s affection for gambling, but also the close relationship he has built with the gambling industry and its lobbyists during his 25-year career in Congress....

in his current campaign, more than 40 fund-raisers and top advisers have lobbied or worked for an array of gambling interests — including tribal and Las Vegas casinos, lottery companies and online poker purveyors.

This is troubling to me on two levels.

The first is the matter of McCain's campaign rhetoric. Now, I know that the way the game is played in Washington is thought lobbyists who can raise millions of dollars to help a candidate-- if he gives them what they want-- or millions to defeat him if he goes against their interests. But Mr. 'straight talk' has staked a lot of his campaign by claiming to be a reformer, and in particular one who doesn't tie himself to lobbyists or special interests. Instead of being a hypocrite about it, why not just fess up, and say 'I've been a tool of the gaming industry for years?' The article even quotes a gaming industry expert who calls McCain, “One of the founding fathers of Indian gaming” Yeah, there are people who might have trouble with that one, but at least then McCain wouldn't be pretending to be something he's not, and that he never was.

The second way this is troubling to me is much more profound, however. Now, I recognize that there is nothing illegal about gambling in a casino, and many good and honest people do. But it also says something about a person's decision making process. And let's face it. The recent past, whether it be McCain's gamble that he could raise enough money fast enough in 2007 to support a $100 million political machine for the primary (a gamble which failed), his gamble that he could skip the Iowa caucuses and still chase down Mitt Romney for the Republican nomination (a gamble that succeeded, thanks to Mike Huckabee getting in Romney's way), his gamble to choose none of the VP candidates his campaign had been vetting for months and instead pick a little-known Governor or Alaska to run for VP (a gamble which looked like it succeeded early on but as time goes on appears more and more questionable), or his gamble last week to play chicken with the debate and try to get credit for the bailout package (a gamble which failed), it is clear from John McCain's decision making process that he likes to take chances, often acting impulsively.

It isn't hard to look for another individual who makes decisions the same way. And on virtually all of them, John McCain has stood right by his side and rolled the dice with him. That person of course is George W. Bush.

President Bush gambled by pushing forward with deregulation, including of banks and of the financial services industry. John McCain stood right there alongside of Bush.

President Bush gambled that we could pass trillions of dollars in tax cuts for the wealthy. It's true that John McCain voted against the first round of tax cuts, but now he stands right with Bush in wanting to make them permanent.

President Bush gambled that we could take time away from the Afghan war and the people who had killed 3,000 Americans on Sept. 11 to go invade another country, Iraq. John McCain stood with him on that decision.

President Bush gambled that the Iraq war would be short, easy and lead to a democracy that we could count on to help us find all those WMD that had to be stored in huge stockpiles all over Iraq. John McCain gambled on that right alongside of President Bush.

President Bush tried to gamble with our Social Security into a privatization scheme that would have tied it to financial markets. John McCain stood right there with Bush and gambled on that one too. Thank God that Barack Obama and Congress stood up and gave a resounding 'no' to that one. Imagine how much more quickly the financial 'iceberg' that Social Security faces would be coming at us if our Social Security was all wrapped up in the financial mess we see right in front of us.

The problem with gambling of course is as Kenny Rogers sang in the song, "The Gambler,"

You've got to know when to hold 'em, Know when to fold 'em. Know when to walk away, And know when to run You never count your money When you're sittin' at the table, There'll be time enough for counting, When the dealin's done.

And for both George Bush and John McCain, their downfall is that second line. Have you ever seen either of them fold and admit to a mistake? Admit that maybe we need to do something differently than what they've been pushing? Well, yeah-- John McCain did change his position on the Bush tax cuts that got us here in the first place. Now he wants to keep them. Trust me, they really like guys like that in Vegas, ones who even when they have a winning hand, throw it away in exchange for a losing hand.

After eight years of a Gambler in the White House (and not a very good one, at that) I'm certain that WE can't take the roll the dice on another risk-taker, especially one who has shown he really doesn't play his cards very well.

Luckily we don't have to. There is a safe alternative. When Barack Obama makes a decision he doesn't gamble. The way he chose Biden is instructive. He collects all the information that he has available. He reads it and ponders what he has read (Obama even took a week off the campaign trail out in Hawaii so he could work throught this decision.) He puts his head together with his advisors (which now includes Biden, who as the chair of the Foreign Services Committee has a great deal of experience in the one area where Obama recognized that he might need some help.) Obama is also a man of faith, so I suspect he prays for help in making the right decision. Then he makes it. And once it is made, he sticks firmly to it. At the same time, he does learn by experience. So for example, this year he opposed a 'vacation' from the Federal gasoline tax (an idea that McCain supported,) relying on his experience from doing the same kind of thing in Illinois and observing that the tax cut failed to reduce gas prices in Illinois (the reason for why it doesn't work would involve a discussion of the mathematical/economic concept of a relatively inelastic equilibrium point on the supply and demand curve which is too complicated to explain here, but Obama gets it.)

With the country facing it's most difficult economic crisis since the 1930's, we need a deliberate and careful decision maker, and one who is forceful in carrying out decisions but also able to recognize what works and what doesn't.

Thursday, September 25, 2008

During the past 24 hours we've seen one candidate engage in a political stunt, jumping into the middle of ongoing negotiations affecting the future of the country as if only He can save us (clearly hoping to get credited with whatever the President and the leaders of the House and Senate come up with). We've seen him refuse to go to a debate that has been scheduled for almost a year, even though there are myriad ways he could still participate (whether by hopping on a campaign plane that could be in Mississippi in a couple of hours, or via satelllite hookup) in a debate in which millions of Americans, still unsure who to vote for, want to see the candidates answer some tough questions.

We've seen the other candidate not lose his cool, come to Washington when the President asked him to but also make it clear that he is prepared to work on the bailout plan AND debate.

What's more, this has been the pattern of the campaign. Obama rarely gets rattled, and doesn't go into crisis mode at the drop of a hat. For McCain, who has weathered numerous changes of his own doing during the campaign (at least two financial crises and several staff shakups) it seems like everything is a crisis all the time.

I know that for the next President I want the guy who won't blow his stack or run off and feel he has to do something rash instead of taking a few minutes to talk about it.

Wednesday, September 24, 2008

At 8:30 this morning, Senator Obama called Senator McCain to ask him if he would join in issuing a joint statement outlining their shared principles and conditions for the Treasury proposal and urging Congress and the White House to act in a bipartisan manner to pass such a proposal. At 2:30 this afternoon, Senator McCain returned Senator Obama's call and agreed to join him in issuing such a statement. The two campaigns are currently working together on the details.

From the McCain campaign:

Senator Obama phoned Senator McCain at 8:30 am this morning but did not reach him. The topic of Senator Obama's call to Senator McCain was never discussed. Senator McCain was meeting with economic advisers and talking to leaders in Congress throughout the day prior to calling Senator Obama. At 2:30 pm, Senator McCain phoned Senator Obama and expressed deep concern that the plan on the table would not pass as it currently stands. He asked Senator Obama to join him in returning to Washington to lead a bipartisan effort to solve this problem.

Now, for a moment let's assume that events are exactly as the McCain campaign describes (though in fact the two statements in their details are not actually contradictory, just emphasizing different points.)

In that case I have only one question: why did Senator McCain then just moments after the phone call to Senator Obama, come out publically and issue a unilateral statement in which he said he was suspending his campaign and returning to Washington and attempting to call off the debate? That was so quick that even if Obama was taking a few minutes to ponder Senator McCain's offer and talk it over with his staff he wouldn't have had time to respond before it was all over the airwaves.

If the two of them were really working on coming together to propose a resolution to this crisis (and both campaign statements seem to suggest that that was the gist of the conversations during the day) then why did McCain clearly become the one to throw it out the window in favor of a political circus?

Was it because he is willing to throw away an opportunity to demonstrate real bipartisanship in exchange for a few moments of appearing to demonstrate it?

Was it because he wanted to make sure (even though both campaigns agree that Obama called first) that he would get credit for whatever comes of this, and not Obama?

Was it because he's not been spending adequate time preparing for the debate and was afraid of getting his rear end handed to him on a subject he is supposed to have the edge on?

Was it because if he can move the first Presidential debate to next Thursday he will be able to cancel the Vice Presidential debate so people won't have their own chance to judge how Palin, who has already been kept away from reporters, thinks on her feet? Is there something about Palin we don't know yet?

Was it because with the polls moving against him, McCain just lost his head and did something desperate?

As we learn more about what happened today and the timeline of events, it is increasingly clear that it is John McCain who has some big questions to answer.

John McCain has said he is suspending his campaign so he can rush to Washington and work on the bailout plan with Congressional leaders. He is also saying he wants to postpone the first Presidential debate, which is scheduled for Friday and has been scheduled for almost a year.

This is the same John McCain who has not bothered to show up for a Senate vote since April 8.

This is the same John McCain who has favored deregulation for years, a big part of why we have this crisis going on even as we speak.

This is the same John McCain who admitted earlier this year that he doesn't know very much about economics and said he needs to be 'educated' about it.

The truth of the matter is that McCain has been out there campaigning nearly every day while Senator Obama has spent some time off the campaign trail prepping for the debates. So McCain's offer is a lot like an unprepared student who realizes two days before the big exam that he hasn't been cracking the books, trying to figure out a way to get his test pushed back so he can catch up to the rest of the class.

Monday, September 22, 2008

I'd like to take you back for a moment, to a time when American policy makers faced an enormous decision.

The time was during the spring of 2002. Following the September 11 attacks, the U.S. had assembled a truly international coalition (remember the world was on our side at that time) to go after al-Qaeda and their Taliban allies in Afghanistan. In an extraordinarily brilliant operation we had driven al-Qaeda from their stronghold in Tora Bora and by working with local warlords had driven the Taliban into a small sliver of mountains and caves in southwest-central Afghanistan.

Though nothing is ever perfect, we won a smashing victory by January of 2002. The one blunder we made was in contracting local Afghan forces to go in and finish off bin Laden instead of doing it ourselves, and he apparently still had either the influence or the money to make his way through their lines. But bin Laden and al-Qaeda were effectively non-entities and the only real question was how long he could stay ahead of our dragnet. We had at that time the full cooperation of the Pakistani military as well. The warlords and other Afghans who had chafed under the rule of the Taliban were glad enough to be gone from it, and the future looked pretty bright.

But then George Bush decided to essentially leave things as they were in Afghanistan, leaving only enough forces there to carry on a war of attrition and he turned our attention to Iraq.

The first major American politician to speak out against the change was Al Gore. He made it clear in the summer of 2002 that we should finish the job in Afghanistan and that it was a mistake to take our eye off the ball. So Republicans accused Gore of playing politics with national security so he could run for President in 2004. Gore responded by making a statement that he would not seek the Presidency in 2004 and continued to press for finishing the job in Afghanistan. I think this is why Republicans so detest Al Gore, more so than pretty much any other Democratic politician (even Bill Clinton.) It is clear that this one area of disagreement would likely have defined where a Gore Presidency would have diverged from the events of the Bush Presidency, and every day that goes by with more bad news from Afghanistan makes it clear that Gore was onto something.

Since then we've seen a muscular re-emergence of the Taliban. The local warlords (who have dubious loyalty to begin with and can be easily bought) began to reconsider their allegiances (why stick with us when it was clear that we were no longer prioritizing them?) The U.S. and our Afghan allies have pretty much become restricted to the cities and military bases, and control only the countryside they are patrolling in, and when they leave it reverts to Taliban control (President Mohammed Karzai has been derisively referred to as 'the mayor of Kabul,' a poke at how far his authority extends.) I've said it before and I've said it again-- the situation we now find ourselves in in Afghanistan is exactly the situation the Soviet Union found itself in during the 1980's. To most Afghans, we have become the Soviet Union.

More ominously the Taliban have strengthened themselves in Pakistan as well as Afghanistan. With the unpopular Musharraf dictatorship itself stirring up opposition to its rule (and by implication support for Islamicists) our best hope for a reliable ally in the war against terror was former Prime Minister Benizir Bhutto. But she was killed, and it is still unknown exactly who was responsible and whether the failure of Pakistan's intelligence service to protect her was by design or incompetence. After seven years of war the Pakistani military and intelligence service, always full of Islamist sympathizers, have lost patience with America and now are led by a weak civilian government that is a very very questionable ally. There is ample reason to suspect that bin Laden and the rest of the al-Qaeda leadership now resides on the Pakistani side of the border. We've conducted more and more raids into Pakistan. The Pakistanis say they want advance notice, but with their intel service rife with Taliban informants we might as well CC al-Qaeda directly if we plan to tell the Pakistanis what we are doing. This week things came to an ugly, ugly head. A massive truck bomb at the Marriott hotel killed scores of people. It is clearly the work of either al-Qaeda or the Taliban (does it even matter anymore which one?) The target was twofold: a clear message to the Pakistani government that they are in grave danger if they continue to work with the Americans at all (a message they appear to have gotten with their first action to kick out the FBI and announce they will run the investigation themselves) and to western interests in Pakistan directly-- obviously the Marriott is an American hotel chain and this one was a favorite of western diplomats and media members, some of whom are among the victims.

Most worrisome of all, Pakistan has nuclear weapons. Right now there is no reason to believe that any Islamicists have access to their nuclear arsenal, but with the situation deteriorating as it is, can anyone be confident that they won't have such access soon? If the specter of a nuclear cloud over an American city courtesy of a weapon smuggled in by terrorists was used to scare people into supporting the Iraq war, perhaps by allowing al-Qaeda and the Taliban to recover in Afghanistan and then expand over the border and establish themselves so strongly in Pakistan the Bush administration has in fact brought that specter far closer to reality than you or I want to imagine.

Now let's concede for the moment that after five long years of war Iraq appears to be stabilized. It won't become a Jeffersonian democracy to be sure, but we have routed al-Qaeda in Iraq (recall that while Saddam Hussein didn't want any organization operating in Iraq that he didn't control, bin Laden sent Abu Musab al-Zarqawi to Baghdad in December 2002 when war was imminent officially to seek dental treatment but in fact to begin organizing al-Qaeda in Iraq.) The Sunnis and Shiites are not carrying out ethnic cleansing anymore. And we know for sure that Saddam's alleged WMD stockpile was a ruse designed to maintain his internal power and scare his blood enemy the Iranians.

But let's say Iraq is a success. Forget for a moment the five years of war there, or the trillion dollar pricetag or the 4,000 American soldiers who have paid the ultimate sacrifice in Iraq. There is just one question. is there ANYTHING AT ALL we gain from Iraq that makes it worth the price of letting our enemies in Afghanistan and Pakistan escape the noose and grow back as they have? With Pakistan and its nukes now part of the equation, the answer is clearly no.

The best evidence that conservatives know they have screwed up is found in the stretching they go through to justify their ill-fated decision to shift focus. The last time I put up a post on the Afghan situation they kept alluding to the losses al-Qaeda and the Taliban have taken since we went to war on October 7, 2001. Point conceded (though they've never been as strong in Pakistan as they are today.) But that argument misses the point. By January 2002 they were driven back to near total defeat. That was when we took our foot off their neck instead of finishing the job. And as a result they are now a virulent cancer, and in a political climate there where our options are far worse than they were at the time. To claim that because they are weaker now than they were on September 11 so we need not worry is like claiming that because Russia is weaker now than the Soviet Union was during the height of the Cold War therefore there is nothing to fear from Putin. Obviously there is a lot to fear from Putin (the past couple of months should have made that clear) and there is a lot to fear from the Taliban and AQ.

Leaving the root of the weed in the ground instead of finishing it off will likely go down as the most consequential decision of the Bush Presidency, and I only hope that the next President will figure out a way to put together a plan that really does get rid of them once and for all.

Friday, September 19, 2008

For a change, it looks like George W. Bush did the right thing. Not that he had a lot of choice.

We came remarkably close earlier this week to a repeat of the events of 1929. Bush, whose legacy is already about as bad as it could be, along with his two biggest economic appointees-- Federal Reserve Chief Ben Bernanke and Treasury Secretary Henry Paulson, was faced with a stark choice between being Herbert Hoover or Franklin Roosevelt.

He and Bernanke and Paulson picked Roosevelt and moved to have the Federal Government aggressively intervene in the banking system to stave off a collapse. Things had gotten so bad at one point this week that investors were actually paying money to park their investments in safe treasury bonds, the first time since the great Depression that the effective interest rate on any kind of federal note had been negative.

A lot of pro-deregulation market oriented conservatives howled at the price tag of the federal bailout-- maybe as high as a trillion dollars. It joins the Iraq war and the medicare prescription drug handout to the pharmaceutical industry as trillion dollar debt busters that the Bush administration has given us. Unlike the first two however this one is absolutely necessary. Without it, well we'd be stuck in 1929 and all that that would augur for a very bleak future.

That isn't to say though that we should just let things go on as business as usual.

To start with, there is some outrage to go around. For instance, here are some golden parachute numbers, for CEO's of firms that failed monumentally:

Stanley O'Neill, Merrill Lynch: $161 million.

Jimmy Cayne, Bear Stearns: $61.3 million (plus another $4 million plus in J.P. Morgan stock, the company that ended up absorbing Bear Stearns.)

I'm sure I could run any bank into the ground as well as these guys did. Why can't I get that kind of cash?

Here is the good golden parachute news:

Daniel Mudd, Fannie Mae: $0Richard Syron, Freddie Mac: $0.

Federal regulators, thanks to the hybrid nature of the companies to begin with, were able to ensure that Mudd's and Syron's golden parachutes failed to deploy. Chalk up two big wins for Federal control.

Beyond that, it is abundantly clear that the 'free market' that American conservatives like to sing about, really means that the rewards are private, but the risk is the responsiblity of all of us. Some hardcore ideologues on the right have been speaking out against the bailouts this week suggesting that we should just let the whole system fail and come crashing down. I guess they wouldn't have a problem with us going back to the 1930's when millions of ordinary people lived under bridges and ate boiled weeds for dinner but I do have a problem with that. Rather, I believe that since ultimately we as a society are on the hook for the long term stability of our economy anyway, and that the economy is tied to the stability of these banks, we should share in the rewards that come with this risk.

I don't necessarily mean through higher taxes either. Some are right that if you tax wealth then the wealthy will find and exploit loopholes to escape taxes. That's not a reason to give up on getting them to pay their fair share in taxes but it does mean that we can't expect to count on taxation of companies who can certainly employ enough lobbyists to create all the loopholes they need as the only answer here.

Nor does regulation provide the answer (though I do agree that we will need to take a look at tightening regulation). We already know that even as these institutions and banks were failing they employed armies of lobbyists and made millions of dollars in campaign contributions all over Washington so it's a fact that regulations can be skirted or rewritten over time (as institutional memories of why they were there in the first place fade).

And yeah, I'd love to see Washington ban corporate lobbyists but you and I both know that isn't going to happen anytime soon, or if it does there will be some loophole left open so they can still funnel money to candidates. So let's talk about practical solutions here, not pie-in-the-sky pledges to 'change Washington' as a way to prevent another crisis originating on Wall Street.

No, what I propose is very simple and straightforward. If the Federal Government is going to effectively back up institutions and banks that make risky decisions and then step in and absorb the fallout when the risks become reality, then we (collectively, as taxpayers) should share in the rewards. Let the Treasury Department hang onto a share-- say in the 10-20% range-- of stock in the company, and mandate that this stock remain under the control of the Federal government for at least 20 years after any bailout. That way if and when the company regains profitability then We the People will get a direct return on our 'investment' (made as it was under the darkest of circumstances.)

This may be criticized as 'socialistic' but let's face it-- the bailout and takeover of Freddie Mac, Fannie Mae and AIG are nothing else. Maintaining a 20% federal ownership of companies like these actually would achieve three goals: 1. it would over time pay us all back as a society so that we wouldn't just be paying out good money for bad, 2. it would help stabilize the share price as the company clawed its way back, and 3. while 20% isn't a majority and the major decisions would ultimately be left to the rest of the investors and the CEO they appoint, it's a big enough piece that the government would have a lot of input. Treasury Secretaries are by nature a cautious bunch so having a representative of the treasury department representing taxpayer interests in a corporate boardroom meeting might influence those decisions in a more cautious direction but clearly that isn't such a bad thing.

And then once 20 years are past, the treasury department could slowly release our shares onto the open market, using the profits to pay off our own national debt or to pay for other spending (possibly reducing the need to collect taxes from the rest of us.)

Wednesday, September 17, 2008

Today Hillary Clinton is being derided for backing out of a rally at the United Nations to protest Iranian nuclear development once she found out that Sarah Palin would also be there.

I think she made a wise decision. There is nothing wrong with protesting Iranian nuclear development or the failure of the U.N. to take a stronger stand against it (though I believe that the Iranians will do what they want to do whether the U.N. toughens their stand or not; and our own misadventure in Iraq has effectively taken any real threat of a U.S. invasion of Iran off the table for the foreseeable future since we right now don't have the available military units to be able to carry it out.)

There is also nothing wrong with Governor Palin going as a representative of the McCain campaign, clearly indicating Senator McCain's support for stronger U.N. action against Iran.

The reason Hillary was right to decide against going is that she might have been stuck with a no-win situation, completely unrelated to Iran or nukes.

Keep in mind that last week Hillary informed the Obama campaign that while she is willing to keep up the attack on McCain she refused to jump all over Palin. And I can see why that is, she herself would gain nothing from such an attack and frankly is probably happy in at least the most general sense that a woman (even one she herself would never support) is now running for VP. It does in a sense validate the historic nature of Hillary Clinton's campaign earlier this year.

Suppose that Governor Palin made a point of seeking out Senator Clinton and making a light conversation, possibly including a handshake? In this hyper-political year, that would be all over the front page and would seem to imply that Hillary at least found a McCain-Palin Presidency acceptable (remember that the McCain folks have spent a lot of time and effort going after disaffected Clinton supporters.) So if that is not a message that Hillary Clinton wants to send she can't afford to be photographed yukking it up while shaking hands with Sarah Palin (though publically neither woman has said anything negative about the other recently).

The other alternative, to publically snub Governor Palin, would be even worse. That would cast Hillary as purely a party hack (not that you would find many Republicans who would say she's not, but it's still a label she doesn't want to refresh.) It would also cast her to a lot of people as rude and would seem to undercut the whole success she had in earning 18 million votes. And that would also be a headline that the Obama campaign doesn't need right now, with Obama gaining momentum in the polls this week thanks to a combination of the Lehman Brothers-Dow Jones-AIG economic woes and McCain's gaffe on Monday that have definitively moved the focus away from Sarah Palin and onto the economy.

So going to the rally was a lose-lose proposition for Hillary. True she is now still getting some bad press (and the right will spin this is a snub of Palin anyway) but it's a minor story and doesn't look one fiftieth as bad as a face to face snub would be.

The job cuts however represent eight percent of HP's total workforce, suggesting that there are some intrinsic structural problems that are also being addressed. In fact, current CEO Frank Hurd has been very aggressive about cutting jobs since he was first hired in 2005.

While I might complain about Hurd's image as the new "Chainsaw Al" or point out that he is far from the only one doing it in these times (the unemployment rate has risen a full point since April) there is one thing that it also points out: the company that Hurd took over was unprofitable, bloated and badly in need of the overhaul he has brought to it.

And who did he replace? The answer is Carly Fiorina. Apparently she is at least partially responsible for the slow, lumbering company that Hurd has been riding herd on (and with some success, at that-- I'll give him credit for that.)

Hmmm. Not long ago the same Carly Fiorina stepped up to become John McCain's chief economic advisor, after Phil Gramm had to step down for saying that the bad economy was just in people's heads and that we had become a 'nation of whiners.'

Just today, John McCain said at a rally in Florida that the 'fundamentals of the economy are strong.' This on a day when the Dow fell 500 points and National Public Radio reported that the International Monetary Fund will be conducting a stability assessment of the United States economy, a 'privilege' usually reserved for third world debtor nations that are in danger of defaulting on their loans.

Well, remember that McCain admitted back during the primaries that he doesn't know very much about economics.

So who else can he get economic advice from? Palin? Whatever her strengths and weaknesses are, has anyone even from Fox News suggested that she knows anything at all about subprime mortgage defaults or has a clue about how to get people back to work?

Keep in mind that the standard Republican playbook of 'tax cuts for the wealthy, loosen regulation and let the market drive the economy' has been in force for eight years and it's clear that it doesn't work.

Electing McCain would be a disaster. Not only has he pretty much appropriated the Bush economic strategy as his own (apparently not being able to figure out a better one) but the people around him, even his economic advisors, seem to have no better a record on the economy than he does.

Monday, September 15, 2008

John McCain today at a rally in Florida-- that's right, TODAY, said that he feels that "the fundamentals of our economy are strong."

Today was the day after Lehman Brothers bank failed and went to bankruptcy court, Merrill Lynch failed and avoided bankruptcy court only because they were bought out by Bank of America (which is itself taking a risk, having recently also bought out mortgage giant Countrywide) and AIG appears headed to bankruptcy court unless something happens fast.

Today was the day when the DOW dropped five hundred points.

Today was the day I heard a report on National Public Radio that the International Monetary Fund will be conducting a stability assessment on the U.S. economy, something which normally happens to developing countries that are on an unsustainable economic course.

Just in the past five months the unemployment rate has spiked upward by a full percentage point.

Strong fundamentals?

I guess if you consider $5 million a year to be the threshhold of 'rich,' the fundamentals are strong. I guess if your plan for tax cuts, market based reform and resistance to regulation is indistinguishable from what President Bush has done for the past seven years, the fundamentals are strong.

Saturday, September 13, 2008

John McCain was confronted during an interview last night on "The View" by host Joy Behar.

She specifically mentioned an ad the McCain campaign has put out (including the legally mandated caption, "I'm John McCain and I approved this message") which accuses Barack Obama of supporting comprehensive sex education children starting in kindergarten.

The truth is that Obama as a state legislature sponsored a bill that mandated teaching kindergarten students to recognize what is inappropriate touching by adults and who they can report it to.

Behar pointed to that ad specifically and said that what McCain had said he stood by (calling this 'comprehensive sex education for kindergarten students') 'are lies.' She asked if he still stood by them.

McCain's response?

"They are not lies."

OK. So this guy claims that calling a program to educate children about child molesters is the same thing as 'comprehensive sex education' for kindergartners.

What is worse, the McCain campaign came out with a statement trying to justify the ad suggesting that this kind of stuff should be taught at home (apparently still using their stock answer for 'sex education' to discuss teaching about pedophiles.) Taking education for kindergartners about pedophiles out of the schools is very dangerous since most child molestation does happen at home, and obviously pedophiles who have children in the home would be the last ones to teach them that there is anything wrong with it, or who they could talk to about it.

This ad, and this ad alone (and McCain's refusal when confronted with the facts to repudiate it) should be enough to disqualify John McCain from any serious consideration for the Presidency.

Friday, September 12, 2008

It appears that hurricane Ike is set to nail the Texas coast, the city of Houston and a quarter of American oil refining capacity. I've already heard that when we wake up tomorrow morning gasoline prices may be up by as much as a half dollar (we filled both our vehicles this evening and lent my daughter twenty bucks so she could buy gas in case those rumors turn out to be right.)

I hope and pray that there is little loss of life (I'd say none, but one man in Corpus Christi, two hundred miles away, has already drowned in heavy surf).

There are some troubling questions I have right now though. The first is why when a mandatory evacuation was ordered for Galveston, so many coastal residents-- as many as a quarter million according to one site I read-- didn't leave. I know that about two weeks ago a lot of them left for Gustav, which weakened and then hit over two hundred miles away in Louisiana. But this was cleary much more dangerous than Gustav, it just seems to me that it is incredibly stupid to hang out on a low lying coastal island with a major hurricane coming. Well, I guess I should feel lucky that I live in a place without many natural disasters.

Now, I know why they haven't evacuated Houston. There was a botched evacuation three years ago for hurricane Rita and the highways ground to a standstill so that more people actually died out on the highway (of both storm-caused and non-storm caused accidents and other problems) than would have died if they'd all stayed home. But the question that has to be asked then is this: why haven't planners over the past three years developed a better evacuation plan for Houston? They knew this day would be here sooner or later. Not only could they have developed a secure network of local shelters (more on that later) but if necessary the state police have the authority to close highways, and if they have to even reverse highways (so that all lanes would lead in the same direction.) That would double the number of lanes available for evacuees. But for some reason they twiddled their thumbs for three years so that now that Houston is again a target all they can do is tell people to remain at home. Let's hope that Ike doesn't flood Houston too badly and that the inevitable damage to homes won't lead to loss of life.

There is another question that will have to be asked if Ike kills a lot of people (or even if it does not): Ike, as a much stronger category four storm, raked every bit of Cuba, crossing the island near its eastern end, with the eye running parallel to and just offshore for a couple of days as it worked its way up the island and then coming back onshore and nailing Havana. It then exited the island at very nearly the same point as Gustav had (and remember that Gustav was also a category four when it encountered Cuba). Yet in spite of what could have been a horrific loss of life (as there has been in Haiti, where Gustav, Hanna and Ike have likely killed at least a thousand people together-- maybe more, maybe many more) the total loss of life from all three hurricanes (Hanna also brushed by Cuba on the northeast) has been five (all from Ike.) Why do these things kill so few people in Cuba even when they are directily in the path? The answer is simple. In Cuba they have a network of local shelters, similar to bomb shelters where local residents can report and ride out the storm. In urban areas they are close enough for most people to walk to, but even in rural ares they are ubiquitous enough that people won't have to take very long to get to one.

I know, Cuba is a repressive communist dictatorship. True, it is. But that doesn't mean they can't do some things right, and the network of safe local shelthers makes a lot of sense. It is a smart alternative to being forced to choose between two risky alternatives-- evacuating millions of people down a few highways within a few hours, or hoping and praying that nothing happens to people who 'ride it out' in their homes.

But building safe local shelters would make entirely too much sense here, so expect no one to suggest that we do.

Tuesday, September 09, 2008

Today, John McCain and Sarah Palin have an article in the Wall Street Journal pledging to 'protect taxpayers' from any more government 'bailouts' like the current government takeover of Fannie Mae and Freddie Mac.

There is one line near the beginning in which McCain argues that . For years, Congress failed to act and it is deeply troubling that what we are now seeing is an exercise in crisis management rather than sound planning, and at great cost to taxpayers.

I'm not sure it is so much the fault of Congress as it is of regulators who are mostly appointed through the executive branch, but if it is Congress' fault then it is worth pointing out that John McCain has been in Congress for a quarter century and I've never once heard him railing against mismanagement in the mortgage industry. True that Obama has been there since 2004, but the problems of lax oversight began long before that.

They seem to be suggesting (without ever explicitly saying it) that they want the Government to no longer back these companies, downsized or otherwise.

Beyond that, the most I can see is that the article is loaded with vague promises, such as to 'push lenders to provide maximum support to credit-worthy customers,' and similar platitudes.

To see where the problem is though, let's remember why Fannie Mae was created as a government agency in the first place (it was not privatized until 1968.)

The year was 1938. The worst years of the Great Depression had passed, but banks were still gun shy about lending money, pretty much to anyone no matter what their credit was. As such, even people who were making decent money couldn't afford a home unless they had the wherewithall to pay cash for it or build it themselves. Because of the continuning tight credit the Depression continued to linger in industries such as construction, manufactured household goods (in those days if you bought a kitchen table the chances were that it was made from New England maple, not Chinese polymers,) timber and other industries that were at least in some degree dependent on housing and homeownership.

Recognizing that the fundamentals of the economy were on the way up but that bankers were still shell shocked at what had happened over the past decade, the Roosevelt administration decided to fix the problem themselves. They created Fannie Mae so that the bankers would have the backing of the Federal Government when they lent money out. And it worked, they went right back to lending out money again.

Now, I'm not suggesting that the current economic crisis is anything like the Great Depression. However it seems that McCain and Palin are unaware in their article that there was a reason why these companies were designed with the backing of the Government. Without it millions of Americans would simply have been denied an opportunity for home ownership, not because they couldn't afford loan payments or were bad credit risks, just that by 1938 risk-aversion had become so ingrained in the banking system that it practically took a Rockefeller to even get a serious review of a loan application.

Today we are in a situation with similar tight credit. We could point the finger of blame back and forth, but it is a fact that today the tight credit situation, even hurting people who are completely credit-worthy makes it necessary that we do more than "push lenders to provide maximum support." It is after all their money on the line and the only real leverage we have is if we can at least partially cover them for a loss if the play goes badly.

Even if bankers could be induced to start lending money out right now without Government backing, would they be so quick the next time a big crisis erupts in 10, 20 or 30 years (recall that the S&L crisis was not all that long ago either)? Likely credit would be the last thing to recover if there was no such backing (just as was the case during the Depression) and in so doing it would deepen and prolong any other economic downturn.

The problem of course with the concept of private companies with Government backing is (as has been mentioned numerous times by many people over the past week) that it 'privatizes the rewards and socializes the risks.'

So I agree that a return to the status quo is a bad deal. Now the the Government is in effect holding ownership of Fannie and Freddie however I'd suggest that there is a case to be made for going back to the the pre-1968 nature of Fannie Mae for both companies. Between 1938 and 1968 Fannie Mae worked quite well despite Government ownership. Bad mortgages that had to be paid back to lenders were more than offset by the money that was coming in from banks holding new mortgages. Now it is true that any industry is cyclic, but in this situation both the risks AND the rewards would be socialized-- so the Government would be able to keep any profit (as it did in the early years of Fannie Mae) and put some away as a provision against a rainy day.

So my answer to this is that we ahve the perfect situation now to get credit moving again. Let's just keep Fannie and Freddie running as government entities.

Friday, September 05, 2008

Today we found out that unemployment in August shot up to 6.1%. This is up more than a full percentage point since April, representing literally millions of people out of work.

Job losses were widespread. Unlike in past months when they have been concentrated in manufacturing and construction, we are now seeing job losses in retail and other services. People are just buying what they have to and nothing more.

So what is John McCain's plan? For starters, he said nothing specific about it in his speech on Thursday. He pledged to cut taxes and cut spending. Yeah. Wasn't this the Bush approach? The Bush tax cuts (which McCain has flip-flopped on, going from opposing them when they were passed to now supporting their extension) achieved an enormous budget deficit which led to a weakening dollar, the subsidizing of companies to build new factories in Asia to which they sent American jobs, and reckless investment in the housing bubble which turned out to be built on sand and destroyed the savings and jobs of millions of Americans when it came crashing down.

He really doesn't plan to do anything about the economy, except the same things as Bush has.

Remember the carnival magician? You'd buy a ticket, go into a tent and watch as the Amazing Zandolini seemed to pull a canary out of an empty box, saw a woman in half and then put her back together, escape from a straightjacket while locked inside a safe, hand you two interlocked iron rings and then separate them, make a rope rise up out of a basket and dance as he played some vaguely middle eastern tune on the recorder, levitate a volunteer in thin air and make all sorts of objects disappear and reappear in a puff of smoke.

You knew of course that it was all sleight of hand, but it was entertaining anyway.

Who knew that the Amazing Zandolini's assistant would go on to run for Vice President of the United States?

We've heard a compelling story this week about Sarah Palin-- that she fought corruption, fought earmarks, cancelled the so-called "bridge to nowhere," cut taxes. and sold her predecessor's private plane on e-bay.

Turns out that it's all smoke and mirrors.

Start with the corruption, since we've been learning all week about how Palin is under investigation herself for apparently abusing the power of her office as Governor to try and help her sister out in a custody dispute with her ex-husband. This has been reported on fairly widely (including here) so I won't repeat all the details, except to say that to claim that Sarah Palin is a corruption fighter is a bit like suggesting that Eliot Spitzer was a fighter against prostitution. She's throwing stones and they are breaking her glass house all around her on that one. She also likes to point out that she ran against and defeated corrupt former Governor Frank Murkowski, who was especially unpopular after engineering his daughter into a U.S. Senate seat. OK, so she beat him. Corrupt politicians often lose because they are corrupt. She was astute enough politically to realize that Murkowski could be beaten in a primary but that in itself says nothing about her own views on corruption.

What about earmarks? Isn't she big against earmarks? Well, no actually. We've learned that while she was mayor of Wasilla, a town about the size of Winslow, she hired a Washington lobbying firm which brought in over 27 million dollars in earmarks for the town. She even once praised Congressman Don Young for helping her town get this 'largesse.' Yup, a fighter against pork. NOT!!

Then when she ran for Governor she promised more of the same. On one campaign trip to Ketchikan she said she supported the proposed bridge that has now become infamous.

So what about the bridge? It became a symbol of so-called wasteful government spending. Demogogues on the right made no end of pointing out that the bridge cost $223 million and would provide road access to an island that had a population of fifty. In fact, they either ignorantly or intentionally omitted the fact that on the island was an airport that serves 200,000 passengers per year who have to be brought over to the mainland by ferry, so in fact a good case could be made for building the bridge. In any case though, Congress decided to make it the symbolic sacrifice of pork they could kill and all look good back home. So Palin, the consummate politician realized it was about to be gone anyway so she cancelled it and took the credit. In her speech this week she said "I told Congress, thanks but no thanks." Only she kept the money! The money that had already been sent up there stayed in Alaska and went to other projects. Not only that but right now the state of Alaska is building the access road to the proposed bridge for a twenty-five million dollar price tag (they did keep that money too.) So if the bridge is never built then this must be wasting money on the 'road to nowhere.'

What about tax cuts? Well, that would be difficult since in Alaska there is no sales tax and no income tax to begin with. Most of the state revenues come from royalties paid to the state by the petroleum industry, as well as the Federal largesse that Alaskans enjoy on a grander scale than residents of any other state (and which Palin for years dined at the trough of.) And in a remarkably progressive policy, the state of Alaska has for several decades sent excess oil revenue to all residents of the state in the form of a once per year check. It is true that with oil prices soaring the revenue has gone up commensurately so this year's check, about $1,200 per permanent resident was substantially more than last year's. If you want to call that a tax cut, I guess you can call it one. But you can call a mule a horse and it still doesn't make it a horse.

Specifically, the plane originally cost $2.7 million and was sold for $2.1 million to businessman Larry Reynolds.

Yet today John McCain is quoted as saying at a campaign stop in Wisconsin,

You know what I enjoyed the most? She took the luxury jet that was acquired by her predecessor and sold it on eBay -- and made a profit!"

Well, McCain can be excused-- this is hardly the first time he's gotten his facts wrong on the campaign trail.

But on the video played about Palin at the GOP convention they said outright that she had 'auctioned it' on e-bay. Either the video was intentionally misleading or very poorly researched. But I'm sure Palin must have known that it didn't really sell on e-bay but she has said nothing to correct the error-- which reflects directly on her own character, and not in a good way.

And for that matter, if she took a loss on the plane then it is fair to ask, now that the state government doesn't have that plane anymore, how she gets around a state where flying is a necessity (you can't drive to Juneau from the rest of the state, for example.) Does she take commercial air? If so does the state government pick up the tab for the flight? If not, then did they buy another airplane? Come on, if they lost $600,000 on the deal then where is the savings? Only an advocate of Bush economics could figure out a way to claim that the state is better off selling a plane they already owned at a loss and then having to pay for the services that the plane would have been providing.

So it looks like everything that Sarah Palin is supposed to be running on is a mirage. A carefully crafted mirage, which makes you wonder exactly who is writing the story-- it looks like something that might be written in a Washington think tank rather than in Alaska.

At least when the Amazing Zandolini pulled a rabbit out of a hat nobody was trying to tell me that it was real.

I didn't hear a single word about health care. I didn't hear a single word about helping people get to college, I didn’t hear a single word or phrase about how to deal with the retirement, security for people, and Social Security.

I didn’t hear the word Afghanistan or Pakistan mentioned where the terrorists live. You know, I mean -- where Al Qaida is. So, you know, what I’m going to try to do and I may not be able -- I mean she’s so good, I may not be able to get to her I’m going to try, is try to point out where we want to take the country and how they don’t have a single answer how to dig us out of the hole we’ve been dug into the last eight years.

Exactly. Barack Obama may have been criticized for what he said about issues in his speech last week, but he addressed them head on. It seems that the McCain campaign doesn't want to talk about them at all.

McCain campaign manager Rick Davis was even more direct this week in an interview published in the Washington Post.

“This election is not about issues. This election is about a composite view of what people take away from these candidates.”

Yeah. Who cares about what a President will actually do in office, we just need someone with a good life story. That's the new G.O.P. line.

Pastor Larry Kroon, who has been Palin's pastor since she and her family joined the Wasilla Bible Church in 2002, introduced David Brickner, the national director of a group called Jews for Jesus. Brickner then gave a sermon, which included an assertion that terrorist attacks in Israel are God's judgement against Jews for not accepting Jesus Christ as their God. Brickner said at one point,

"Judgment is very real and we see it played out on the pages of the newspapers and on the television. It's very real. When Isaac [Brickner's son] was in Jerusalem he was there to witness some of that judgment, some of that conflict, when a Palestinian from East Jerusalem took a bulldozer and went plowing through a score of cars, killing numbers of people. Judgment — you can't miss it."

Also in the Politico article, we see this snippet:

Palin was in church that day, Kroon said, though he cautioned against attributing Brickner’s views to her.

Now I agree that what someone else says in church are their words and don't necessarily reflect the views of people sitting in the pews (though that hardly dissuaded the right from trying to suggest that Jeremiah Wright's sermons reflect Barack Obama's views.)

But it is fair to ask, since we have the word of her own pastor that she was present in church two weeks ago, whether this reflects her own view of the reason why there is terrorism in Israel. Barack Obama has been very clear in laying out which statements by Jeremiah Wright and Michael Pfleger he disagrees with, so it is time to ask Sarah Palin to do likewise.

Tuesday, September 02, 2008

I recently put up a post on the race here in CD-1 in which I predicted that Ann Kirkpatrick would win a close race against Howard Shanker. In the same post I predicted that Sydney Hay would win relatively easily against Sandra Livingstone.

I am happy that I was off on the numbers.

Kirkpatrick, who I've made it clear that I support, turned in a very strong performance today. The only real question is whether she will keep above fifty percent of the total vote against three challengers. In fact, it seems that she has dug deeply into the support in Flagstaff and other areas where there are a number of liberal activists that I had expected to go to Shanker, who will finish third. Mary Kim Titla as of right now has exactly the same percentage I had predicted for her (28%) but it is a distant second, not a close third.

What this does is validate Kirkpatrick as the clear choice of Democratic voters. I don't know what the final results will show tonight, but I am hopeful that she wins with an outright majority.

The Republican race is also good news, from my perspective. For one thing, It's too close to call. Sydney Hay, who I had expected to win by a solid margin, instead is leading by a narrow margin against Sandra Livingstone.

Although as a Democrat and Kirkpatrick supporter I am strategically nervous about Livingstone (I think she is about the only Republican who might be able to win this year), her strong showing makes it very clear that the anti-immigrant wingnuts who have hijacked the Republican party are still more bark than bight. Livingstone has sent them into apoplectic seizure with her immigration plan which involves giving undocumented workers who are already in the U.S. work permits (hence making them legal) and then from there giving them a path towards citizenship. The minuteman-oriented portion of the nutbag right is livid at Livingstone, but her strong showing in which she has come from way behind to give Hay a strong race sends a clear message that a whole lot of GOP voters don't buy into their rhetoric and want humane, practical solutions. Given the previous failures of the anti-immigrant right to mount much electoral support for their candidates (most notably in not showing up to help immigration blowhard J.D. Hayworth save his district in 2006 after he had earned the wrath of local Hispanics) a Livingstone win would be an unspeakable embarrassment. Even a close race, if Hay pulls it out (which it looks as though she may) in a race which even a month ago was not much of a contest shows the anti-immigrant crowd as the small group of nuts that they are. They can make lots of noise, sure. But they can't do much to help a candidate win-- certainly less than Hispanics can do to help him or her lose.

$27 million, to be exact. For a town of 6,700 residents. That works out to about $4,000 per person in Federal largesse.

Now, I actually don't have a problem with that. I believe that what is commonly termed 'pork' represents an investment in needs all over America that might not otherwise be met. In isolated and rural areas, pork is actually of critical importance in building and maintaining infrastructure.

But she should quit pretending to be a crusader against pork. She was a master at procuring it, and she might do better to acknowlege that. After all, isn't a President supposed to have some skills at negotiating with Congress and obviously Palin already has them.

Since I posted the other day on the investigation launched by the Alaska legislature of Sarah Palin regarding whether she used her official position to punish a state official who didn't satisfy her desire for revenge against her sister's ex-husband, it seems to be growing.

There had been recorded phone conversations of an official who worked for Palin, Frank Bailey calling Public Safety commissioner Walt Monegan and pressuring him to fire the trooper, Michael Wooten. Some on the right had hopefully argued that it may stop there, and that Bailey may have done this without the Governor's knowledge. Perhaps, but apparently in the past twenty four hours it has come to light that there are emails, including some originating from the Governor herself that have been collected and retained by the private investigator in the case. Palin herself has now retained an attorney.

What is most interesting though is that a team from the McCain campaign is now on their way to Alaska. Now, if this was all expected and had shown up when Palin was vetted, why would they be sending people to Alaska now? Clearly they are worried about how all this will play out. He may end up with a choice between accepting a Dan Quayle (keeping her on the ticket even though she is a drag on it) or a Tom Eagleton (kicking her off the ticket.) Either way it's not good for him. Maybe Palin will do him a favor and find an excuse to step down before the convention is over.

In this day and age of the internet, instant communication and professional dirt diggers though, it was foolish of either McCain or Palin to think that just because it was something going on up there in Alaska, this would stay buried. Digging up skeletons is hard work, but if it's there then it will come to light.